Study: Higher Taxes are Good for a Nationâ€™s Health and Well-Being

A new study revealed that countries with higher taxes are happier, healthier, benefit from more research and development, and a higher GDP rate per person, meaning they are making more money overall.

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The study, by Neil Brooks and Thaddeus Hwong at the Canadian Center for Policy Alternatives, compares high-tax Nordic countries and low-tax Anglo-American countries on 50 social and economic measures and finds the high-tax Nordic countries score better in 42 categories than Canada. The US fared even worse.

The more heavily taxed Nordic countries have:

lower rates of poverty, more equal income distribution, and more economic security for their workers;

a higher GDP per capita;

higher rates of household saving and net national saving;

greater innovation, including a higher percentage of GDP spent on research and development;

a higher ranking on their growth competitiveness by the World Economic Forum;

higher rates of secondary school and university completion; and

less drug use, more leisure time, and higher life satisfaction.

The U.S. falls near the bottom of the 21 industrialized countries in a strikingly large number of social indicators.

In contrast, Finland ranks near the top of the industrialized world in most of the social indicators and has been named the most competitive country in the world by the World Economic Forum four years in a row.

“The tax cut lobby has it backwards,” says Hwong. “Not only do government social programs create a healthier society, they also create the conditions for a vibrant—and competitive—economy.”

“By cutting taxes, the Conservative government in Canada is headed in the wrong direction,” says Brooks. “It wants to make Canada more like the United States, yet our findings show that Americans bear severe social costs for living in one of the lowest taxed countries in the world.”

COMMENTS

Flawed StudyWhile I doubt this study, I am happy to report that per capita income world wide has grown; but why.

It is utopia to think that everyone is altruistic and would work harder and harder and watch more and more of the money flow to someone who is less industrious. Nearly everyone would choose the role of the person who plays all day, and waits for a raise. Doesn’t make common sense, and is of course completely against human nature.

The truth is that the poster child for a more socialistic economy is Sweden. Sweden has aggresively increased the overall taxation of its citizen over the past three decades, but Sweden has plummeted in nearly every economic measure? Sweden’s cultural heritage of hard work saved it for some time; one must admire how much it could tax the system with more and more government before it began to sputter and breakdown.

Relying on the conclusion of the study above, Sweden, with the largest taxation of GDP in the world, at 54%, should be by far the most propserous nation, relatively speaking. Yet, Sweden, once the 3rd most prosperous nation in the world, and heralded as the model for modern socialism, measured this year, dropped from 3rd to 18th in the world over the last few decades. And, Sweden’s unemployment rate, measured by independent economists lies between 15% and 20%. Sweden’s most recent labor Secretary states unemployment is at a staggering 25% in 2006; and scholars note that not a single net” private sector job has been created in Sweden since 1950. The official government figure on unemployment is 6%

Global competition leads EU countries to chase groThis good news suggests that the original article was not representing the true situation. The stats here suggest that the Nordic countries, and soon the UK, have realized the long term impact of taxation.